Why the Stadium Deal Isn't Done

Thirty-three years after the Washington Senators left town, the District government won a multi-city competition to relocate the Montreal Expos to the nation's capital. Now that the District has a team, the D.C. Council is trying to walk away from the agreement that brought the team here in the first p lace.

When Major League Baseball agreed to move the Montreal Expos to Washington in 2004, we had a number of options available. Base ball in Washington had many good arguments -- a potentially strong fan base, a large metropolitan area and a mayor who demonstrated leadership and commitment in bringing the sport back to town. But Washington wasn't alone -- other cities wanted a baseball team and they, too, were bidding to get it.

Washington also had problems. The Senators left the District of Columbia 30 years ago for a reason -- they found more fan and governmental support in Texas. When baseball made plans to expand in 1990 and 1995, Washington's desire to secure a team was easily outmatched by the enthusiasm and commitment of Florida, Colorado, Arizona and Tampa Bay. With the Baltimore Orioles close by and a city government that isn't known for efficiency, Washington had a few negatives on its side of the moving ledger.

A ballpark on the Anacostia waterfront was not baseball's first choice. We preferred the Banneker site, south of L'Enfant Plaza. In the end we agreed to Anacostia, and the District agreed it would be in charge of the new stadium's design and construction. In fact, the city wanted to be in control of the project because of development issues that went far beyond the stadium's construction.

The D.C. government views a stadium in Anacostia as a magnet to attract businesses, homes and economic activity to its waterfront. That means the costs associated with the plan the mayor announced in December 2004 -- to construct more than 3 million square feet of new office space, more than 4,500 units of new housing and 32 acres of new public parkland, along with road improvements and an expanded Metro -- are tangled with stadium issues, even though Major League Baseball has nothing to do with these development matters and, under the original agreement, would make no money from them.

In baseball and in business, if you run the project, you're responsible for its costs. When teams are in charge of design and construction, any savings go to them and any cost overruns are borne by them. That's what was done with new ballparks for the Detroit Tigers and the San Francisco Giants. That's also how MCI Center was built. On the other hand, when a government agency is in charge of design and construction, the benefits and risks are covered by the city. That's what happened in Baltimore at Camden Yards and in Cleveland and Pittsburgh as well. That's common sense, and it's fair. It is also what is happening in Washington. Because the Nationals will generate $250 million for the District in sales taxes and rent payments generated at the stadium (large businesses pay the rest of construction costs), baseball has input into the new stadium's design and construction, but government officials make the decisions. D.C. planners chose the stadium's architect. The city government, not baseball or the Nationals, decided what the Nationals' new stadium will look like and what material will go into it, from the type of concrete used to the types of seats in the suites. Government workers selected the stadium's construction companies, and these same governmental employees will oversee the construction work.

But now, some members of the D.C. Council have asked baseball to pay for any stadium cost overruns, even though city personnel will control the variables that cause the stadium to be built on budget or run over cost. Asking baseball to pay for overruns when D.C. government officials are in charge of the stadium's design and construction is like MasterCard telling you to pay your credit card bill even though MasterCard gets to do all your shopping. No consumer would agree to such a provision, and neither will Major League Baseball.

The District, for all its many pluses, is not an easy city with which to do business. City leaders frequently quibble with baseball about its commitments, and they often quarrel with each other. There are so many interested parties in the D.C. government that it seems on some days that no one is in control and on other days that everyone wants to be in control.

For example, city officials decided to move the original site plan of the stadium 50 feet south, at substantial incremental cost because of different excavation requirements, to accommodate commercial development on the site. Architectural plans have been written and rewritten to address the aesthetic concerns of city officials, even though their specific proposals -- such as what the exterior of the stadium should look like -- have no impact on the game inside.

The city has missed three important deadlines it committed to as part of the agreement that brought the Expos to Washington. It failed to sign a lease, take control of a buildable site or secure funding, all of which the city was obligated to do by Dec. 31, 2005. The city had a year to get its work done -- and it's not done yet.

Such examples show an active interest in the management of the stadium by government officials. They also show that D.C. officials have little interest in giving up control -- the more negotiations go on, the more control city officials have sought and bargained for.

Experience in other cities demonstrates that well-managed construction plans don't lead to cost overruns. The places where overruns were most pronounced were in cities where the stadiums had complex and costly roofs, such as Seattle and Arizona. On the other hand, costs for open-air stadiums like the one proposed in Washington are fairly predictable when they're well managed. The stadiums built in Baltimore, Colorado, Pittsburgh, Cincinnati and San Francisco all came in on budget.

Washington is a great sports town, and the Nationals had a successful first year. But Washington officials have farther to travel to bring this relocation to the successful conclusion we all thought it was one year ago.